It Doesn't Pay: The economic impact of dropping out of high school

Charlie Coffey, O.C.
Executive Vice President
Government Affairs & Business Development
RBC Financial GroupNational Dialogue on Students at Risk ConferenceFairmont Hotel Vancouver
Vancouver, British Columbia

Tuesday, February 28, 2006

Thank you Niki I'm pleased to join you, my panel colleagues
and the champions of youth in this room for a discussion about
the economic, social and health impacts of dropping out of
high school. For a day and a half now, you've engaged in students
at risk dialogue with public officials, community leaders,
health experts, academics, program directors and the impressive
list goes on from Sister Bernadette O'Reilly and the
Rossbrook House story in Winnipeg, to Dr. Carl Porter
and the early child development link, not to mention,
Norman Rowen and the Pathways to Education story in
Regent Park, Toronto. I also want to thank Veronica Lacey
(and The Learning Partnership) for inviting me to participate
in this important and timely forum - a forum which is helping
to connect the entire country on this national and international
issue.

I remember well when "the plight of students at risk
in Canada" was the subject of a National Roundtable involving
senior policy decision makers from across Canada on January
26, 2005. The day culminated in a keynote dinner address by
Dr. Douglas Willms, Director of the Canadian Research Institute
for Social Policy at the University of New Brunswick. And
I also remember Veronica's comments following the event: "It
is a moral, social and economic imperative to reduce the gap
between students who achieve and those who fail. As the issue
is urgent and complex, the dialogue and responsibility for
the solution must be embraced with pan-Canadian resolve and
action." So here we are once again - and I think it's
safe to say that we hear the call to action.

It's been said that, "the capacity to learn is our most
abundant and precious resource." Education is the foundation
of Canada's economic well-being and the prerequisite to sustaining
our quality of life. Quite simply, dropping out of high school
doesn't pay.

Michael Bloom, Director of Education and Learning, the Conference
Board of Canada sums it up well: "Knowledge is the currency
of our economy and learning is a key to maintaining productivity,
competitiveness and prosperity. By stimulating innovation
in public education and learning systems, Canadians will become
more highly skilled, creative and adaptable-qualities leading
to an innovative society and a better workforce." Again,
dropping out of high school simply doesn't pay.

So let's talk about the economic impact of students dropping
out of high school - and some ideas to help address this issue.
At the same time, it's useful to keep in mind that the social
and health impacts are all interconnected. To get us started,
it's helpful to recap the landscape:

"Canada's high school dropout rate has declined significantly
since the early 1990s, especially in the Atlantic provinces",
according to a December 2005 Statistics Canada report, which
acknowledges support from Dr. Cappon's group, the Canadian
Council on Learning.

"During the 1990/91 school year, one out of every
six young people (in the age group of 20 to 24), or 16.7%,
was neither attending school, nor had a high school diploma.
By 2004/05, this rate had slipped to 9.8%."

"Outside of Canada's largest communities, the drop-out
rate in the 2004-2005 school year was 16.4%, almost double
the rate (9.2%) within Census Metropolitan Areas."

"Dropout rates also remain substantially higher among
the Aboriginal population. Despite significant gains in
the last decade, the gap between Aboriginal and non-Aboriginal
youth has widened."

"Young men were less likely to be engaged in school
than young women and were more likely to report wanting
to work/earn money as a reason for dropping out of high
school. 15.9% of female drop-outs left school because they
were pregnant or they needed to tend to their child."

"The evidence also suggests that potential employers are
less likely to hire high school dropouts. The unemployment rate
among dropouts aged 20 to 24 in 2004/05 was 19.4%, double that
for all others in this age group, a reality that will be reflected
in earnings and longer term prospects." In other words,
dropping out of high school simply doesn't pay!

"The labour market in Canada rewards those with education."
High school drop-outs have a harder time finding work than
others who follow secondary school through to completion and
perhaps continue in the education system. To quote from one
of the Canadian Council on Learning pieces, Lessons in
Learning: "The good news is that high school dropout
rates have been declining steadily over the past decade. The
bad news is that among certain sub groups - rural and Aboriginal
students in particular - the rates are well above the national
average."

"The substantial decline in the dropout rate over the
past decade suggests that many of the programs put in place
to encourage young people to stay in school until they graduate
(including second chance programs) are meeting with success."
Yet despite the progress, there remain over 200,000 young
Canadians who can be called dropouts. "This is
even more concerning, given the evidence that some young dropouts
do reasonably well in school in terms of academic performance."

It's been accepted for many years now that students who don't
complete high school, face many more challenges later in life,
than students who do. A 2005 report from the Educational Testing
Service in Princeton, New Jersey, entitled "One-Third
of a Nation: Rising Dropout Rates and Declining Opportunities",
alerts readers that not enough is being done to curtail rising
dropout rates and their economic costs.

"This is a story of losing ground," writes author
Paul Barton. "At the same time that the dropout rate
is increasing and out-of-school education and training opportunities
are dwindling, the economic status of young dropouts has been
in a free fall since the late 1970s. Employment and earnings
prospects have declined and even for those who work full time,
earnings have dropped steadily to averages around the poverty
line for a family with children."

Barton goes on to say: "Almost 45 years ago, James Conant,
former president of Harvard, said that the dropout problem
was 'social dynamite.' The explosion has occurred, and will
continue to occur. This is seen in growing prison populations
and increasing welfare costs; in ever lower wages; in a limited
labor supply for, we are told, an economy with an increasing
appetite for educated workers; and in the likelihood of raising
a new generation with dim prospects of doing better - and
perhaps of doing worse." Dropping out of high school
simply doesn't pay!

Barton paints a grim picture for the United States but also
adds: "The nation has proven it can focus on improving
education achievement while students are in school in
this there is a promise that it can also give such focused
attention to keeping them in school until graduation."
Canada can think and do likewise - it's our call to action.

Not surprisingly, "a large and growing body of research
findings suggest the more education, the better, especially
when it comes to making a smooth transition into the workforce.
The consequences of dropping out can be great, and there are
many concrete things that schools, families (and yes business),
can do to help students stay in school" - to help our
future workforce become leaders in the new economy.

The bottom line is the bottom line. "Having a high school
education and diploma, not only can provide entry to postsecondary
education (college or university), it sends a strong signal
to prospective employers. In 2004, the unemployment rate among
people aged 25 to 44 who did not have a high school diploma
was 12.2%, while for those whose highest level of education
was high school, it was much lower, at 6.8%. Moving to higher
levels of education, the unemployment rate continues to drop,
although not to the same extent."

It bears repeating dropping out of high school simply
doesn't pay!

Canada is obviously moving in the right direction - we've
made progress with our dropout rate - however this is no time
to be complacent, as there's much work to get done. Besides,
progress must be nurtured to continue. The dropout statistics
suggest that future success in prevention will depend on our
ability to reach out to particular sub-groups that are experiencing
above average dropout rates - young males, young mothers,
students in rural areas and aboriginal students.

We must focus on aboriginal students - on community-based
learning, on employment and on language and culture. "The
aboriginal population is the fastest growing segment of Canada's
workforce. More than half of this population is under 25.
About 400,000 aboriginal young people are poised to enter
the job market over the next 20 years." Promising job
opportunities and careers will encourage Aboriginal students
to stay in school and help them make the transition from school
to work. RBC's Aboriginal Stay in School Program is
one example of many in this room, in Vancouver, in British
Columbia and across Canada we need to push the envelope
on this "students at risk" priority.

The same goes for male students, young mothers and students
in rural areas. As the recent Canadian Council for Learning
article and other sources suggest: rural schools may want
to partner with local businesses to create stay-in-school
or school-to-work initiatives. "Male students may be
more inclined to stay in school if they can see a direct connection
between schooling and near-term employment opportunities.
School-to-work programs including co-operative education and
apprenticeships are extremely valuable in this regard. And
programs that enable young women who become pregnant to continue
their education while caring for their children remain important.
Affordable, high-quality child care is a critical component
of any such program." Again, dropping out of high school
simply doesn't pay!

I also want to weave in three more noteworthy and interrelated
elements to our dropping out of high school doesn't pay
economic dialogue - they include: early child development,
literacy and what I refer to as ego-strength:

Early child development. According to the 2003
Business Roundtable/Corporate Voices for Working Families
Joint Statement: Early Childhood Education - A Call to Action
from the Business Community: "High-quality early childhood
education produces "long-term positive outcomes and
cost-savings that include improved school performance, reduced
special education placement, lower school dropout rates,
and increased lifelong earning potential. Not only does
high-quality early childhood education make a difference
for children, it matters to their employed parents. Employers
increasingly find that the availability of good early childhood
programs is critical to the recruitment and retention of
parent employees."

Literacy. Human Resources Development Canada and
Statistics Canada reports reveal that: "Young teenagers
who began high school with weaker literacy skills were more
likely to drop out before they reached Grade 12." There's
more "A major contributor to economic growth consists
of the literacy skills of a country's population, broadly
defined to include prose, document and quantitative literacy.
In other words, when literacy skills are in high demand,
individuals who possess strong literacy skills are more
successful in the labour market than individuals whose literacy
skills are weaker."

Ego-strength. Here's an excerpt of an article
from thelearningweb.net called The secret heart of learning
- it goes like this: "Henry Ford summarized part of
the equation many years ago: 'If you think you can, or think
you can't, you're right.' Others have said: 'We are what
we think we are. We become what we think we'll become.'
And we're not talking about the touchy, feely, all-you-have-to-do-is-think-and-you'll-grow-rich
brand of fantasy. In our view, all self-esteem has to be
firmly grounded in positive achievement. And real achievement
is grounded in self-esteem. You have to achieve something
specific to achieve full potential. 'Feeling good about
yourself' is not enough, although it's part of the secret.
You also have to ground your feelings in something you can
do well - math, science, cooking, reading, karate, sport,
singing, dancing - whatever." As many might say, this
is ego-strength or resiliency at play. And let's not kid
ourselves - ego-strength is part of the equation - ego-strength
does impact the economic, health and social dimensions of
the student population and especially students at risk.
It's the right encouragement behaviour that parents, teachers
and employers must foster with high school students - and
I dare say throughout the cycle of life.

For many years, people here today (and countless others),
have made a major and collective contribution to early child
development, literacy, ego-strength and supporting stay
in school initiatives. We're often more successful when
creating strong partnerships among schools, businesses, governments
and communities - by adopting a holistic approach. You're
assuming a leadership role by encouraging educators, business
colleagues, not to mention community administrators to do
what most of you are already doing. Share best practices and
show up at best practices - find out what's going on in your
community and communities from coast to coast. Talk to students,
invite business/educator contacts to workplaces, schools and
symposiums and connect decision-makers/influencers to students
so they can listen to one another directly.

In his presentation, "Wait to Fail" Dr. Douglas
Willms (who I mentioned at the start of my remarks) makes
several thought-provoking observations, including one about
redefining school readiness. He says: "Learning readiness
is not a characteristic of a child. All children are ready
to learn. Instead, think about learning readiness as a characteristic
of a school. Is a school ready to meet the learning needs
of the children it serves?" His comments made me reflect
on a similar and perhaps related question: if we presume that
most high school students are ready to learn at work, is a
business ready to meet the learning needs of its student employees
- do we make our opportunities and environments enticing enough
so that they prefer to finish high school first and even go
beyond?

As Ontario Premier Dalton McGuinty maintains: "Building
a well-educated and highly skilled workforce is the most important
thing we can do to ensure our future prosperity helping
our students succeed is the most important thing we can do
to help them achieve their full potential." In this day
and age, it may be hard to find an issue that enjoys unanimous
political agreement, but I'll go out on a limb here and suggest
every Premier in Canada would share this perspective.

Connecting what students learn in the classroom and how they
apply this learning in the workplace makes good economic sense.
Providing both students and educators with more opportunities
to discover and experience the work environment also makes
good economic sense. Student participation in the workplace,
chatting with young people about their futures and nurturing
positive attitudes about work and school, also makes good
economic sense for RBC - and for other corporations/businesses
too.

In short, the economic impact of students dropping out of
high school is enormous. High school students represent a
huge pool of talent - a huge pool of largely untapped talent
that's getting ready to be engaged in business, in public
service and in communities - to be contributors to a robust
economy. We can help students get ready in school - to value
school. And we can help students get ready for the workplace
- to value the workplace. This is not an option, this is an
imperative - the intrinsic link between education and economic
prosperity is too significant to ignore.

In order for learning to become a way of life, increasing
educational opportunities must become the shared goals of
stakeholders - from students and teachers, to parents and
grandparents, to business people and volunteers. As a father
and businessman, I'm strongly convinced that our children
and students deserve nothing less. As such, I'll close by
saying it one more time for good measure: dropping out of
high school simply doesn't pay!